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Stupid tax on housing trashed, “community sector” howls

By johnboy 20 March 2006 16

The Canberra Times has a report in which the ACT Minister for Housing, John Hargreaves, once and for all puts the kibosh on the insane dreams of the “community sector” to force real-estate developers to mandate a portion of their work as “low-rent” housing.

As Caroline Lemezina of the Housing Industry Association says “we don’t support mandatory zoning, as it would only increase the base price of housing and make it even less affordable,”

The ghoulish failed examples of attempts at rent control in other parts of the world seem to have been sufficient warning here.

One hopes the prospect of using their own good connections to secure this favoured form of housing wasn’t the motivation for the “community sector”.

Bringing prices down is a very simple matter of increasing supply. The Government’s been doing a lot of that lately and we can only hope they keep doing it.

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16 Responses to
Stupid tax on housing trashed, “community sector” howls
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Maelinar 8:41 pm 22 Mar 06

IMHO the only tried and true way of reducing rent is for the market to get so bloated with lifestyle investments that it crashes when it realises that people have moved elsewhere in an attempt to purchase an affordable house.

Currently the market is steamrolling it’s way in that direction…

Yes Adelaide is a shithole that nobody wants to live in, but so was Canberra 50 years ago, it’s merely a matter of sitting out the crushing overvaluation of Canberra at the moment, or moving.

The Greens however should not have such problems, since they think that housing (don’t mention foskey, don’t mention foskey, don’t mention foskey) is either a (sustainably constructed under ethical and humane conditions) treehouse, or bedding down in a VW Combi (complete with 70’s curtains).

Indi 5:08 pm 22 Mar 06

Roland GRNS, I’m glad you’re not a communist and I should clarify that we can gain a lot more from cherry-picking policy options from a number of points on the ideological spectrum.

By clear definition, if there are not enough $$ incentives to invest in a selection of housing options then the investors will not engage.

You are quite right that ACTCOSS does have a lot to offer the debate about housing in the ACT, trouble is I doubt the govt are willing to listen.

Ari 3:27 pm 22 Mar 06

Hey Roland GRNS – I’ll bet you’re glad you can finally enter a discussion on housing policy without having to defend “Snout” Foskey’s hypocrisy and greed.

Roland GRNS 2:40 pm 22 Mar 06

Indi you make interesting assumptions about me and what I realise.
there is a lot of stuff out there about dealing with market failure, and about how to effect change in the market, about what impact the federal government polices on housing speciofically and negatiove gtearing tax breaks on the othe, have had to housing supply across Australia.

That doesn’t make me – or the ACT Council of Scoial services (for example) communists, nor by definition does that make us opposed to “mum and dad’ investors.

GuruJ 1:47 pm 22 Mar 06

As far as I can see, the only way to make renting more affordable is through a direct subsidy — effectively a broader version of the Rent Assistance provisions for those on Youth Allowance from Centrelink.

Yes, while this may lift rent rates a little (since more people will be able to afford higher rates), at least those that need the support most will be disproportionately better off.

Indi 9:04 pm 21 Mar 06

Roland GRNS – just how much thought have the Greens given this quandry? You may not realise that small investors remain reliant on such ‘breaks’ as negative gearing to provide housing and to become ‘self-reliant’ via investment to see themselves through during retirement.

You do realise we do not live in a socialist/communist society…but rather an economically/liberal democratic society, regardless whether or not the libs/alp are in in govt.

Roland GRNS 2:04 pm 21 Mar 06

Obviously it depends on how you set it up

johnboy 12:46 pm 21 Mar 06

great, more negative gearing, as if a landlord won’t pocket the difference and still charge what the market will bear?

Roland GRNS 12:35 pm 21 Mar 06

Low rent through land tax and negative gearing concessions on low rent properties, combined with ownership of some housing by non-gov affordable housing providors in addition to housing…supply rather than demand management (the Adelaide/Sydney/qbyn solution.)

Again, the ACTCOSS/Shelter publication “Wealth of Home” is a good starting point.

johnboy 11:34 am 21 Mar 06

when is the Government going to put some money into SA’s “Adelaide – not a boring shthole in the middle of nowhere” campaign to encourage Canberrans to move there and stop paying exorbitiant rates here?

I thought those ads were more of a “Adelaide – not as much of a boring shthole in the middle of nowhere as you thought” nature?

johnboy 11:31 am 21 Mar 06

how’re you going to keep those properties “low-rent” without controls?

Roland GRNS 11:22 am 21 Mar 06

I don’t recall the community sector advocating for rent control. But support for increasing provision of low rent properties, through focussing local and national tax concessions perhaps, is another matter.

John Hargreaves fails to mention the inclusionary zoning he (and the HIA) rejects was recommended by his government’s own 2002 Affordable Housing Taskforce and the Assemby’s Labor dominated Planning and Environment Committee last year.

erewego 11:19 am 21 Mar 06

ignoring decreasing demand:
when is the Government going to put some money into SA’s “Adelaide – not a boring shthole in the middle of nowhere” campaign to encourage Canberrans to move there and stop paying exorbitiant rates here?

VYBerlinaV8 8:52 am 21 Mar 06

Negative gearing is certainly part of the story, but the property market moves in cycles, regarding both the cost of property and the cost of renting. At the moment we are in the aftermath of a major boom, so it will take a while for incomes to catch up to costs again.

johnboy 4:08 pm 20 Mar 06

i agree with what you’re saying, sadly negative gearing is beyond the scope of local government.

until supply actually exceeds demand I think it’s unfair to say the market cannot work.

and local government still keeps the market tight.

annie 3:29 pm 20 Mar 06

I agree with you on one point: the community sector’s plan for rent-controlled housing was insane.

But I disagree that the solution to making houses more affordable is to simply increase supply.

There was quite a lot of land released in Sydney over the past decade, but it wasn’t cheap to buy because the developers had to cover their costs and make a profit (and a lot of the cost was to do with land taxes and local council charges).

House prices and rents have also been pushed up because of negative gearing, where lots of people flush with cash from the equity in their homes went and bought more property at more than its actual value.

We now have a situation where house prices are still inflated because it would cost too many people too much money if the values went back to a not-insane level, even though investment activity has dropped off somewhat.

That’s my opinion anyway.

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